Science Podcast - Abundant bacterial vesicles in the ocean and a rundown of stories from our daily news site (10 Jan 2014)

December202013

TERRA 826: A Wolf's Place

Gray Wolves stand on the edge of a precipice. Wild wolf populations across the Northern U.S. have rebounded to healthy, sustainable levels with the protection of the Endangered Species Act. Wolf advocates declare it a biological and political victory. But many ranchers call it a crime, demanding the wolves' immediate eradication... and they may just get their wish. Widespread hunting seasons have already opened in Montana, Idaho and Wyoming, with the rest of the country potentially following suit as we debate delisting all wolves in the U.S. Whether you see the wolf as the majestic cousin of man's best friend, or as a bloodthirsty devil bent on destruction, we all have a visceral reaction to these misunderstood animals. "A Wolf's Place" takes a close look at how wolves have impacted the ecosystem since their reintroduction to Yellowstone 18 years ago, and the effect the recent hunting season have had on the park's wolves. It also tells the personal story of Wolf #10, the first wild wolf released into Yellowstone in over 70 years -- his triumphant life and his tragic death in the sights of a poacher's gun. Produced by Annie White.

February152013

Science Podcast - Plant Virus Ecology - AAAS Meeting [Feb 15, 2013]

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Viruses are notorious for their role in disease but only about 1 percent of viruses are actually pathogenic. The diversity of roles viruses take on in ecological systems include protecting plants from cold and moderating nitrogen fixation.

February012013

TERRA 803: WildFIRE PIRE: A World On Fire

WildFIRE PIRE is a National Science Foundation five-year project that is an international partnership coordinated by the Montana Institute on Ecosystems and Montana State University that focuses on the causes and consequences of fire in the past, present, and future. Scientists from research universities and agencies in the United States, Tasmania, and New Zealand have combined efforts to compare how past fire occurrences have influenced climate change and what these patterns can tell us about the future. With the primary areas of study in the Yellowstone Ecosystem, Australia’s Tasmanian conservation areas, New Zealand’s forests, and Patagonia’s wild places, the project is exploring how wildfires, which are often devastating, are related to climate change.

OAPEN
(Open Access Publishing in European Networks) is a collaborative
initiative to develop and implement a sustainable Open Access
publication model for academic books in the Humanities and Social
Sciences.

October312011

TERRA 614: Feeding the Problem

What began in 1912 as a gracious effort to save the Jackson Hole elk herd from harsh winters, shrinking habitat, and dwindling forage, has morphed into a century-long feeding program on what is now the National Elk Refuge and 22 other State-run feed grounds. This biological experiment has created a petri dish for wildlife disease and is now one of the most contentious, fiercely debated issues in the Greater Yellowstone Ecosystem. Feeding the Problem is a balanced and in-depth exploration of this unique conservation dilemma from the people most intimately connected to it.

March292011

This statement, the title of an essay by evolutionary biologist T.G. Dobzhansky, was published in "American Biology Teacher" in 1973. It properly asserts that evolution is the cornerstone of any meaningful dialogue in the biological sciences, stressing the importance of ecological theory in understanding biological system behavior.

We can extend this ecological theme of interconnectedness to modern financial and commercial activity, where we can just as easily state: "Nothing in economics makes sense, except in the light of ecology." Large-scale events that have disrupted energy, agricultural and material supply chains in recent months underscore the importance of viewing the world through a spatial lens.

With each passing decade, as new manufacturing and production origins have come online, the barriers to entry that for many years had prevented the functioning of a true global economy have slowly been dissolving. No industry or country can now be considered immune to the financial fallout stemming from supply disruptions. While globalization has most certainly provided much of the world with many benefits, from cheap, reliable energy, food and telecommunications, to an ever-expanding universe of choices to enrich our lives culturally and materially, the increasing number of choices is accompanied by a more fragile economy, susceptible to perturbations.

So while we continue to enjoy the aforementioned benefits of a connected economy, we need to recognize and appreciate the potential magnitude of the underlying risks. The global raw material supply chain is now spread out very thinly. So much that when even the undocumented news of a potential threat to the supply of particular materials sends ripples through the markets, affecting in near real time both the price of the material in question and the equity valuations of those in the exposed industries.

Darwin meets the Fed

As such, perhaps it is now time to take a more serious ecological or geographical approach to risk as it pertains to global commerce. Nassim Taleb repeatedly argues that the financial system needs to robustify. Using nature as a metaphor, Taleb maintains that mother nature is redundant, and the financial system should employ similar measures of redundancy to avoid blowing up. Multiple layers of protection are necessary to protect against shocks. While this redundancy can limit the swings to the upside (much to the chagrin of many fund managers ), it also spreads out the risk when the negative events inevitably arise, minimizing the disastrous consequences.

Theoretical biologist (and former managing director at Deutsche Bank) George Sugihara also calls for ecological principles to be included in more comprehensive risk management and mitigation strategies. Drawing from Sugihara's own research into fishery management and collapse, he suggests that the early identification of tipping points, rather than trying to model irrational investor behavior, may serve as a more effective means to alert economists to potentially significant market corrections. We may even go as far back applying some of the early ideas of Darwin, by taking into account the influence of selective pressures, and the subsequent nonlinear nature of the evoked response.

Natural capital

These are just a few of the many instances where modern economic analysis and the goal of financial stability can benefit from approaches grounded in the natural sciences. This is a theme that has certainly been around for a long time, but I don't feel that it has ever been taken seriously by those outside of academia. For risk managers striving to protect either natural or financial capital (or both), the need to appreciate not only the connections within a system, but more importantly their underlying geographical opportunities and constraints, is the first step in robustifying markets. Therefore, instead of trying to export theories of what prudent investors would or should do according to standard economic theory and structuring positions to capitalize on these assumptions (efficient markets are actually a fallacy), when a market-moving event commences, a robust strategy grounded in ecological principles will survive, and over the long term have a better chance at providing a healthy return.

While the risk manager may not be able to prevent the initial shock to the market, he or she may be able to better anticipate the potential effects, and in the process, properly construct a hedge to avoid the consequences. On paper, the job of the modern financial risk manager is to preserve capital, striving to maintain positive returns while minimizing drawdown. In practice however, the risk manager is as much a speculator as the head trader. To compound the increased risk for a collapse, most fund managers are watching their radar for the same potential risks. When an event surfaces and catches the market by surprise, (ie., Australia floods, Argentina drought, MENA civil unrest, increased volatility in oil prices, Japan earthquake, etc.) almost everyone loses. Will an approach that is partially resistant to such shocks limit the upside, curbing the potential bonus of a fund manager? Absolutely. But it will also ensure that the fund manager is still around to enjoy the capital they are paid to preserve and grow.

Only a truly diverse portfolio can be considered stable or robust. As in large scale-agriculture, monoculture may work for a while, but eventually, diversity wins.

March102011

On Wednesday, the Financial Times sponsored a very timely conference in New York with a focus on sustainable investments. In the face of uncertainty surrounding climate legislation, long term viability of certain alternative energy sectors, and risk averse investors, there were many relevant topics to be discussed.

The primary theme of the conference centered around tools and themes relating to investments in the environmental infrastructure of the next 10-50 years. Like any conference with a green theme, the typical high-level topics were covered. Discussions were woven around ESG reporting requirements, market outlooks for renewable credits, equity driven recommendations around who is/is not taking the lead, and long term sustainable investment themes.

Despite all of the positive discussions, I felt somewhat empty after leaving the final session of the day. I should be clear that this is not through a lack of qualified speakers or interesting discussion topics. Quite the contrary — for the most part, the speaker lineup was far better than what has been the standard self-promotional speakers that typify green conferences.

The problem was that there was not much new to discuss in what can be a viewed as a great market opportunity. I have been working at the intersection of applied technology, finance and environmental commodity markets for more than 15 years. The piece that bothers me is that the action items, for the most part, are the same as those that were ubiquitous when I came out of graduate school (ie., define "sustainability") in 1996.

The bright spot: data

However, it became clear through the course of the day that there is a bright spot for a niche that has not been exploited to any meaningful degree in this community: the application and analysis of new and existing forms of data.

It was only a couple of decades ago that most manufacturing companies reported only what was required to satisfy local, state and federal pollution permits and/or regulations. The environmental management divisions were usually part of health and safety groups (many still are) and they were largely considered to be internal watchdogs, making sure that operations continued with minimal permit violations.

As cost pressures on raw materials and operations increased, innovative companies started to look at their own wastestreams for alternative uses of material not integral to the primary activity of the facility. As a result, new markets were spawned out of incremental improvements in operational procedures, centered around efficiency. Fast forward to 2011 and we now see job titles such as "chief sustainability officer" and "director of global environmental strategy." Instead of being a liability, cleaner operational procedures essentially evolved into a strategic profit center, right alongside the "core" business units.

The fact is that most companies are now tracking their inputs and byproducts very carefully, whether they are doing so as a direct means to reduce pollution, as a cost-savings measure, or simply for PR to satisfy investors. The net result is that there has been an exponential increase in efficiency/environmental data available for primary stakeholders and investors alike. The challenge, and what I see as the opportunity, is how this data can be turned into something that creates value beyond the obligatory satisfaction of regulatory requirements.

All of the panels at the FT event presented cogent arguments for being proactive, and how their financial performance correlates to their various activities (I was particularly impressed by the discussion by the Bombardier exec). But I do want to see what comes next. What I really wanted to learn was how these massive datastreams, possibly analyzed in a different way, can create new markets. It is nice to say that we reduced pollutant-X by a measure of 20% year on year. It's even better to say that we turned 15% of pollutant-X into a profit center.

Some interesting facts and partial truths came out of the various talks of the day, many of which stressed that new ways of doing business are needed to keep up with seemingly insatiable demand for raw materials. For example, in one early talk, a panelist noted that the US has only one metro population center with greater than 5 million people. By contrast, China has 51.

But there were also times where some fact checking was probably needed, evidenced by the statement from another panelist who described the sustainability initiatives at most Indian companies as top of mind to everyone from CEO to clerk. Or, that China has emerged as the world's cleantech leader as a result of the desire to develop industries around cleaner sources of energy extraction and production. While the benefits can not be discounted, we should be clear that in both cases the market is the driving mechanism.

I was also pleased to see a session devoted to what I feel will be the environmental wildcard of the century. Regardless of what may or may not emerge on the climate side, the limiting factor for all global corporations, whether they be in energy, material extraction, or agriculture, will be water.

Getting back to data, the sustainability focus of a manufacturing company stands to benefit from the current developments in the fledgling world of the smart grid. Industrial ecology is, at heart, a perfect application of applied data science. If what the associated sectors have been moving toward comes to fruition, in theory, a facility can be expected to manage every ounce of material (and byproduct) from the moment it crosses the gate on the inbound side, to where it leaves the facility as product, emission or effluent. New economic uses for previously discarded material will also be realized, as one man's waste is another's treasure. One need to look no farther than bagasse in Brazil for a simple example.

When it comes to establishing a meaningful dialogue around the creation and utility of data, the use of proper metrics will certainly arise as an issue, as will the creation of a meaningful baseline. When a panelist described her percentage reduction of a certain byproduct without referencing normal usage at a facility, this does not mean very much out of context. A weather analogy is appropriate here: Regions of interior Australia have been reported over the last few months to have received 500% more precipitation than the five-year average. However, +500% over 0.1 mm is still nothing.

What I am really looking forward to is next year's FT conference, with at least a session or two that has data at its core.

January122009

July032008

TERRA 435: Burning the Future: Coal in America PREVIEW

Do you ever wonder where the juice to charge your iPod was produced? Like over half the electricity in the United States, it probably came from a coal-fired power plant run on coal from the mountains of West Virginia. This reliance on coal raises a score of questions about people, land, and a region's future. In the first of a three-part series of excerpts from "Burning the Future: Coal in America", we meet some of the West Virginians affected by our country's coal policy and see some of the health and ecological costs wrought by it.

Do you ever wonder where the juice to charge your iPod was produced? Like over half the electricity in the United States, probably from a coal-fired power plant run on coal from the mountains of West Virginia. This reliance on coal raises a score of questions about people, land, and a region's future. In the first of a three-part series of excerpts from "Burning the Future: Coal in America", we meet some of the West Virginians affected by our country's coal policy and see some of the health and ecological costs wrought by it.